Secret deals with pharma sector make up more than half of Belgium's drugs spending

The federal Health minister is signing confidential agreements with the pharma sector to negotiate price discounts, De Standaard reports on Tuesday. Frank Vandenbroucke's socialist Vooruit party has always strongly opposed pharma deals, which now account for more than half of Belgium's spending on drugs.

Over the past three years, 120 contracts with the pharmaceutical industry have been renewed or newly concluded for the reimbursement of innovative drugs. Those contracts account for 2.8 billion euros or almost 60 per cent of the total budget Belgium spends on drugs. In 2014, it was only half a billion euros or 13 per cent of the budget, according to figures from Inami, the national institute for sickness and disability insurance.

By entering into these contracts, the government is trying to negotiate significant price discounts for innovative drugs. These include Zolgensma, the hugely expensive drug for a muscle disease that became known in Flanders through the high-profile case of baby Pia, and Kaftrio, used to treat cystic fibrosis.

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The contracts also benefit the industry. If companies know they will have to give a big discount to the government, they can set the official price a lot higher. This allows them to play countries against each other. Kaftrio, for example, officially costs 200,000 euros per patient per year, but a secret deal with pharma company Vertex could bring the price down. The exact discount is not publicly known. 

The system of secret contracts originated in 2010, and was intended to be an exceptional measure for certain innovative drugs whose benefits were not yet entirely clear. It was only in the last government term, under Health minister Maggie De Block of Flemish liberal party Open VLD, that the system gained popularity. Thirty per cent of the drugs budget went to concluding secret contracts with the pharma industry. That trend has continued under Vandenbroucke. 

However, three years ago, his socialist party was vocal about ending the practice, and limiting secret contracts was a key goal during the 2019 elections. Vandenbroucke has said the lack of transparency around secret contracts is becoming a democratic problem and is undermining trust in the government. 

He called it a "prisoner's dilemma". The system is used because negotiating large discounts is advantageous. But when many countries use the system, companies start to charge higher prices, and eventually everyone loses.



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